That means ~10 million people who bought the phone are going to be stuck on the outdated version 2.3 Gingerbread (or 2.2 Froyo in many cases) until they decide to drop more cash on a new phone.
It also means Samsung is basically throwing its pledge to the Android "Alliance" that it will keep devices released within 18 months updated with the latest version of the OS out the window.
Samsung says its hardware isn't powerful enough to support Ice Cream Sandwich and its TouchWiz skin for Android. (TouchWiz is the extra layer of design Samsung adds to its Android phones. It looks a lot like iOS.)
This is awful news. Samsung just made Google look really stupid for ever claiming that Android devices will start getting on a somewhat unified update cycle, similar to what iPhone and Windows Phone users enjoy now.
It also demonstrates the inherent problem in Android phone manufacturers customizing the OS to the point where you can barely recognize Google's original intentions for design and functionality. Those skins are such a tax on a phone's hardware that it cripples functionality and makes it so all but the newest phones miss out on updates. So far, Samsung only guarantees Ice Cream Sandwich for its Galaxy S II phones. The Nexus S, which is also made by Samsung and shares similar hardware specs as many Galaxy S phones, will get the Ice Cream Sandwich update, but only because it uses a pure version of Android without the TouchWiz skin. Motorola only guarantees it for its latest Droid Razr. And HTC will issue Ice Cream Sandwich for the Rezound some time next year.
What a horrible time to buy any Android phone that isn't a Nexus-branded device. Buying a Galaxy Nexus right now seems to be the only way to guarantee you're going to get future Android updates. Otherwise you could be waiting months, a year, or (most likely) never before Samsung or whoever made your phone decides it's time for an update.
Therein lies one of the biggest problems with an open source OS like Android. Just because Android is splintered across devices from several manufacturers like Samsung, HTC, and Motorola is no excuse for Google not to make sure they'll be ready for future updates.
Look at Microsoft. Every single Windows Phone is eligible for the latest version of Windows Phone 7, even if the phone was released more than a year ago. That's because Microsoft has been smart about how it licenses Windows Phone 7, giving manufacturers a list of hardware requirements the devices must follow before they can start using the platform.
As Google (GOOG) continues to stick with its kumbaya message that Android should remain free and open for anyone to use anyway they please, its users are getting shafted. They have no guarantee that they'll get updates as Google issues them unless they buy a Google-approved Nexus device.
Meanwhile, Apple (AAPL) and Microsoft (MSFT) will continue to eat Google's lunch when it comes to delivering the best software to all their devices.